Vukile Property Fund Limited · JSE:VKE
Vukile Property Fund — H1 2016 Earnings Presentation
42 slides from Vukile Property Fund's earnings presentation, November 2015
Slide 1: Results presentation
Vukile Property Fund Limited Unaudited condensed consolidated interim results 31 for the six months ended 30 September 2015 Results presentation
Slide 2: Interim results for the six months to 30 September 2015: Agenda
Vukile Property Fund Limited RESULTS PRESENTATION Unaudited condensed consolidated interim results for the six months ended 30 September 2015 32 INTERIM RESULTS FOR THE SIX MONTHS TO 30 SEPTEMBER 2015 www.vukile.co.za 1 AGENDA 01 Highlights 02 Financial performance Portfolio performance and 03 overv
Slide 3: Total assets: setting the scene
Vukile Property Fund Limited Unaudited condensed consolidated interim results 33 for the six months ended 30 September 2015 TOTAL ASSETS Setting the scene Growing exposure to complementary and strategic listed assets in addition to our direct portfolio Growing development exposure through Joint
Slide 4: Highlights
Vukile Property Fund Limited RESULTS PRESENTATION (continued) Unaudited condensed consolidated interim results for the six months ended 30 September 2015 34 HIGHLIGHTS 7.0% increase in the first half distribution Strong operational performance Vacancies contained at 4.7% of GLA Like-for-like
Slide 5: Distribution history and simplified income statement
Vukile Property Fund Limited Unaudited condensed consolidated interim results 35 for the six months ended 30 September 2015 DISTRIBUTION HISTORY 11 years of unbroken growth in distributions 136.8 Cents per share 126.5 120.4 111.4 109.0 107.9 97.9 88.3 76.8 77.7 71.7 68.2 68.5 63.8 62.8 60.9 61.5 63.
Slide 6: Simplified income statement and group net income analysis
Vukile Property Fund Limited RESULTS PRESENTATION (continued) Unaudited condensed consolidated interim results for the six months ended 30 September 2015 36 SIMPLIFIED INCOME STATEMENT Strong like-for-like growth of 6.1% Sep 2015 R’m Stable portfolio 25.3 Properties acquired in prior year 9.5 Proper
Slide 7: Group net income analysis
Vukile Property Fund Limited Unaudited condensed consolidated interim results 37 for the six months ended 30 September 2015 GROUP NET INCOME ANALYSIS Income R1 051.8 million R’000 % Rental income and other R787 827 75.0 Investment and other income R34 530 3.0 Electricity and water services recovered
Slide 8: Group expenditure analysis and group balance sheet
Vukile Property Fund Limited RESULTS PRESENTATION (continued) Unaudited condensed consolidated interim results for the six months ended 30 September 2015 38 GROUP EXPENDITURE ANALYSIS Expenses R648.7 million R’000 % Finance costs R180 491 28 Distribution on shares issued post 31 March 2015 R 48 188
Slide 9: Bad debt and arrears analysis; group debt structure
Vukile Property Fund Limited Unaudited condensed consolidated interim results 39 for the six months ended 30 September 2015 BAD DEBT AND ARREARS ANALYSIS Prudent provisioning policy Tenant arrears increased by R11.5 million from R51.1 million at March 2015 to R62.6 million at September 2015 Doub
Slide 10: Vukile debt structure (excluding Synergy)
Vukile Property Fund Limited RESULTS PRESENTATION (continued) Unaudited condensed consolidated interim results for the six months ended 30 September 2015 40 VUKILE DEBT STRUCTURE (excluding Synergy) Fixed interest bearing debt Fixed rate debt (R'm) Fixed interest rate (%) June 2020 200.0 9.41 Februa
Slide 11: Synergy debt structure
Vukile Property Fund Limited Unaudited condensed consolidated interim results 41 for the six months ended 30 September 2015 SYNERGY DEBT STRUCTURE Fixed interest bearing debt Fixed rate debt (R'm) Fixed interest rate (%) June 2019 80.0 9.83 July 2017 50.0 10.15 June 2017 60.0 9.58 May 2017 90.0 9.14
Slide 12: Group net cash flow and NAV bridge
Vukile Property Fund Limited RESULTS PRESENTATION (continued) Unaudited condensed consolidated interim results for the six months ended 30 September 2015 42 GROUP NET CASH FLOW 4 000 000 3 500 000 848 257 3 000 000 1 221 380 2 500 000 2 000 000 (1 272 133) (106 265) 1 500 000 185 683 631 683 34 530
Slide 13: Share prices and trading volumes
Vukile Property Fund Limited Unaudited condensed consolidated interim results 43 for the six months ended 30 September 2015 SHARE PRICES AND TRADING VOLUMES Closing price and trading volumes – 1 October 2014 to 30 September 2015 21.00 35 000 000 20.00 30 000 000 19.00 25 000 000 18.00 20 000 000 17.
Slide 14: Overview and valuation parameters
Vukile Property Fund Limited RESULTS PRESENTATION (continued) Unaudited condensed consolidated interim results for the six months ended 30 September 2015 44 OVERVIEW Valuation parameters Total Vukile Synergy Number of properties 105 90 15 GLA 1 400 167m² 1 200 245m² 199 922m² Valuation R14.6 b
Slide 15: Leasing and tenant exposure; top 10 tenants
Vukile Property Fund Limited Unaudited condensed consolidated interim results 45 for the six months ended 30 September 2015 LEASING AND TENANT EXPOSURE For the six months ended 30 September 2015 leases were concluded with: Total contract value R983 million Total rentable area 176 441m² Lease ren
Slide 16: Sectoral profile and portfolio composition
Vukile Property Fund Limited RESULTS PRESENTATION (continued) Unaudited condensed consolidated interim results for the six months ended 30 September 2015 46 SECTORAL PROFILE 67% exposure (based on value) to Retail sector Value: R14 647m GLA: 1 400 167m² Portfolio including Synergy Portfolio includin
Slide 17: 10 largest retail properties
Vukile Property Fund Limited Unaudited condensed consolidated interim results 47 for the six months ended 30 September 2015 10 LARGEST RETAIL PROPERTIES Dobsonville Shopping East Rand Mall Phoenix Plaza Gugulethu Square Pine Crest Centre Value # R1 071m (7.3%) 50% share R 690m (4.7%) R 441m (3.0%) R
Slide 18: Geographical profile and vacancy profile
Vukile Property Fund Limited RESULTS PRESENTATION (continued) Unaudited condensed consolidated interim results for the six months ended 30 September 2015 48 GEOGRAPHICAL PROFILE (GLA m²) Vukile 43 23 Synergy 12 12 4 9 5 7 6 24 58 14 11 26 Retail 5 Offices 4 54 14 Vukile 10 37 7 12 20 82 % of Portfol
Slide 19: Individual properties vacancy profile
Vukile Property Fund Limited Unaudited condensed consolidated interim results 49 for the six months ended 30 September 2015 INDIVIDUAL PROPERTIES VACANCY PROFILE (% OF GLA) Vacancy > 1 000m² RETAIL : VUKILE (3%, up from 2.5%) Randburg Square (7%) Roodepoort Hillfox Power Centre (6%) Bloemfontein Pla
Slide 20: Expiry profile; lease renewals and new leases
Vukile Property Fund Limited RESULTS PRESENTATION (continued) Unaudited condensed consolidated interim results for the six months ended 30 September 2015 50 EXPIRY PROFILE Retail portfolio - 51% expiring in 2019 and beyond % of GLA 88 100 79 62 100 47 80 27 69 3.4 49 18 34 3.4 15 20 11 20 15 16 Vaca
Slide 21: Contracted rental escalation profile; weighted average base rentals
Vukile Property Fund Limited Unaudited condensed consolidated interim results 51 for the six months ended 30 September 2015 CONTRACTED RENTAL ESCALATION PROFILE Rental escalations still ahead of inflation Escalation % 8.9 8.9 8.7 8.2 8.2 7.9 7.7 7.8 7.7 7.8 7.8 7.6 7.8 7.7 7.5 7.5 7.2 7.3 7.3 7.3 7.
Slide 22: Weighted average base rentals R/m²
Vukile Property Fund Limited RESULTS PRESENTATION (continued) Unaudited condensed consolidated interim results for the six months ended 30 September 2015 52 WEIGHTED AVERAGE BASE RENTALS R/m² (excluding recoveries) Vukile Retail portfolio Boksburg East Rand Mall (50%) Durban Phoenix Plaza Durban Wor
Slide 23: Ratio of gross recurring cost to property revenue; recurring expenses
Vukile Property Fund Limited Unaudited condensed consolidated interim results 53 for the six months ended 30 September 2015 RATIO OF GROSS RECURRING COST TO PROPERTY REVENUE Tight cost management over time Expense ratio (%) 35.2 36.4 34.7 34.0 33.9 33.0 33.1 31.5 30.2 30.7 18.4 17.8 17.1 17.7 16.7 1
Slide 24: Refurbishments
Vukile Property Fund Limited RESULTS PRESENTATION (continued) Unaudited condensed consolidated interim results for the six months ended 30 September 2015 54 REFURBISHMENTS Meadowdale Mall Redevelopment completed and relaunched in October 2015 The gross lettable area of the new centre is now a to
Slide 25: Refurbishments
Vukile Property Fund Limited Unaudited condensed consolidated interim results 55 for the six months ended 30 September 2015 REFURBISHMENTS Sanlynn Office Park : Lynnwood, Pretoria The office park is situated on Lynnwood Road just east of the N1 Highway. This is a popular commercial node and the up
Slide 26: Conversion and energy management
Vukile Property Fund Limited RESULTS PRESENTATION (continued) Unaudited condensed consolidated interim results for the six months ended 30 September 2015 56 CONVERSION Randburg Square Office Tower Conversion of B grade office building into 180 Affordable Apartments The Apartments will be a mix o
Slide 27: Alternate income strategy; acquisitions, disposals and developments
Vukile Property Fund Limited Unaudited condensed consolidated interim results 57 for the six months ended 30 September 2015 ALTERNATE INCOME STRATEGY CENTRALISED MARKETING CENTRALISED ALTERNATIVE INCOME INVENTORY PLATFORM 1. IN MALL 2. OUT OF MALL 3. DIGITISING THE MALL 4. LOYALTY PROGRAM 1. Local m
Slide 28: Acquisitions and disposals
Vukile Property Fund Limited RESULTS PRESENTATION (continued) Unaudited condensed consolidated interim results for the six months ended 30 September 2015 58 ACQUISITIONS Transferred during H1 F2016 Purchase Initial Price Transfer Property Sector GLA m² Yield R'000 Date Moruleng Mall (80%) Retail 31
Slide 29: Deals concluded; development in progress
Vukile Property Fund Limited Unaudited condensed consolidated interim results 59 for the six months ended 30 September 2015 DEALS CONCLUDED Bedworth Centre The Bedworth Centre is a small regional shopping centre measuring 33 948m² The centre is located in Bedworth Park in Vereeniging south of Jo
Slide 30: Development in progress; new developments
Vukile Property Fund Limited RESULTS PRESENTATION (continued) Unaudited condensed consolidated interim results for the six months ended 30 September 2015 60 DEVELOPMENT IN PROGRESS Thavhani Mall – Thohoyandou Limpopo Thavhani Mall will be a dominant regional mall measuring 50 000m² It is being d
Slide 31: Corporate activity and strategy; Fairvest
Vukile Property Fund Limited Unaudited condensed consolidated interim results 61 for the six months ended 30 September 2015 CORPORATE ACTIVITY AND STRATEGY Laurence Rapp www.vukile.co.za 59 FAIRVEST Strategically aligned niche player Current shareholding of 31% valued at R359 million Strategical
Slide 32: Atlantic Leaf investment rationale
Vukile Property Fund Limited RESULTS PRESENTATION (continued) Unaudited condensed consolidated interim results for the six months ended 30 September 2015 62 ATLANTIC LEAF Investment rationale Vukile keen to expand into offshore markets Positive risk adjusted returns Positive gearing as funding
Slide 33: Atlantic Leaf strategy and key property portfolio stats
Vukile Property Fund Limited Unaudited condensed consolidated interim results 63 for the six months ended 30 September 2015 ATLANTIC LEAF Strategy is to invest in high-quality real estate assets which deliver suitable returns through both income and capital growth Focus on acquiring and managing q
Slide 34: Strategic update and key strategic pillars
Vukile Property Fund Limited RESULTS PRESENTATION (continued) Unaudited condensed consolidated interim results for the six months ended 30 September 2015 64 STRATEGIC UPDATE Strong Operational focus to continue Vacancies Energy management Alternative income management (AIM), non-GLA revenue
Slide 35: Prospects and acknowledgements
Vukile Property Fund Limited Unaudited condensed consolidated interim results 65 for the six months ended 30 September 2015 PROSPECTS Focus on a number of strategic initiatives to be finalized prior to the financial year end in March 2016 Definitive entry strategy into the residential market G
Slide 36: Questions and answers; Appendix
Vukile Property Fund Limited RESULTS PRESENTATION (continued) Unaudited condensed consolidated interim results for the six months ended 30 September 2015 66 QUESTIONS AND ANSWERS 69 APPENDIX 70 NOTES:
Slide 37: Expiry profile: office and industrial portfolios
Vukile Property Fund Limited Unaudited condensed consolidated interim results 67 for the six months ended 30 September 2015 EXPIRY PROFILE Office portfolio - 37% expiring in 2019 and beyond % of GLA 87 90 100 80 61 100 41 73 79 63 10.2 42 21 6.8 21 21 10 6 21 14 Vacant Mar-16 Mar-17 Mar-18 Mar-19 Ma
Slide 38: Expiry profile: sovereign, hospital and motor related
Vukile Property Fund Limited RESULTS PRESENTATION (continued) Unaudited condensed consolidated interim results for the six months ended 30 September 2015 68 EXPIRY PROFILE Sovereign portfolio - 55% expiring in 2019 and beyond % of GLA 95 99 100 46 94 98 100 45 44 45 7.2 12 5.9 8 36 1 49 4 2 1 Vacant
Slide 39: Weighted average base rentals: office portfolio
Vukile Property Fund Limited Unaudited condensed consolidated interim results 69 for the six months ended 30 September 2015 WEIGHTED AVERAGE BASE RENTALS R/m² (excluding recoveries) Office portfolio Jhb Houghton Estate Oxford Terrace Pretoria Lynnwood Sanlynn Cape Town Bellville Suntyger Jhb Houghto
Slide 40: Weighted average base rentals: other portfolios
Vukile Property Fund Limited RESULTS PRESENTATION (continued) Unaudited condensed consolidated interim results for the six months ended 30 September 2015 70 WEIGHTED AVERAGE BASE RENTALS R/m² (excluding recoveries) Other Pretoria Navarre Building Pretoria Koedoe Arcade Sovereign Pretoria De Bruyn Pa
Slide 41: Bastion Graphics
BASTION GRAPHICS.
Slide 42: Real estate. Real growth
REAL ESTATE. REAL GROWTH www.vukile.co.za seemed ie [ limitless ot